2011 (2) TMI 1626 - AT - Income Tax

Summary

Issues involved: Appeal against deletion of addition u/s 148 for under valuation of property.

Facts of the case:
- AO made addition of Rs.36,71,532 based on difference in valuation by DVO and cost disclosed by assessee.
- AO reopened assessment u/s 148 based on DVO report indicating under valuation.
- Assessee challenged addition, pointing out mistakes in DVO report and discrepancies in valuation.
- Assessee provided ledger account and financial statements to support cost of immovable assets.
- Assessee contended no defects in books of account and DVO report had errors.
- Assessee argued addition was not justified as it was a mere estimate.

Decision of CIT(A):
- CIT(A) deleted the addition after considering assessee's explanation and material on record.
- CIT(A) noted AO did not discuss defects in DVO report pointed out by assessee.
- Cost disclosed in books of account was not considered correctly by DVO.
- No defects in books of account were pointed out by AO.
- Addition made solely on DVO valuation without evidence of unaccounted expenditure.
- CIT(A) found DVO report had defects and justified deletion of addition.

Appellate Tribunal's Decision:
- Tribunal found no merit in revenue's appeal.
- Tribunal agreed with CIT(A) that AO failed to address defects in DVO report.
- Tribunal noted no defects in books of account were pointed out by AO.
- Tribunal upheld deletion of addition as DVO valuation had errors and difference was negligible.
- Tribunal dismissed revenue's appeal, affirming CIT(A)'s decision.